Friday 29 Mar 2024
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KUALA LUMPUR (Aug 24): Prasarana Malaysia Bhd is shifting its target to achieve positive earnings before interest, taxes, depreciation and amortisation (Ebitda) to beyond 2021 due to crippling effects of the Covid-19 pandemic on public transport services.

Its president and group chief executive officer (CEO) Muhammad Nizam Alias said the group’s original target to record a “profitable year” in 2021 was based on the state-owned public transport operator’s stellar performance last year, having narrowed its losses by 59% to RM249 million on a record revenue of RM1.05 billion.

“If we are able to push our capacity numbers to pre-Covid-19 levels, then we should be fine. But I don’t think we can achieve that by the end of the year with the kind of economic challenges that we are facing now. [The year] 2020 will be very bad,” he told a media briefing on Prasarana’s performance for the first half of 2020 (1H20) here today.

“Our focus is to bring back the confidence and as many passengers as possible into our network. With all the efforts by the government and the private sector, I think we should be able to see an improvement [in terms of the group’s financials] in 2021,” he added.

For 1H20, Prasarana recorded a revenue of RM277.3 million, down 42% from RM474.8 million a year earlier. This was also 43% lower than the group’s original revenue target of RM484.3 million for the period. Losses before interest, taxes, depreciation and amortisation stood at RM269.6 million versus RM121.7 million for 1H19.

During the six-month period, Muhammad Nizam said, both Prasarana’s Rapid Rail and Rapid Bus suffered reduced ridership at unprecedented levels.

Rapid Rail, which operates the Light Rail Transit (LRT), Mass Rapid Transit (MRT) and Monorail services, recorded lower ridership of 63,239,143 passengers, down 43.9% from 112,729.82 in 1H19, while total passengers of Rapid Bus, which operates in Kuala Lumpur, Selangor, Penang, Perak and Pahang, dropped 49.2% to 41,307,192.

“In promoting usage of the group’s services, Prasarana rolled out the My30 unlimited travel pass on June 15 as part of the government’s efforts to revitalise the economy that was severely hit by the coronavirus pandemic,” said Muhammad Nizam.

“A special package offered until the end of the year, it temporarily replaces the My100 and My50 packages — offering unlimited rides on all Rapid KL public transport services at only RM30 for 30 days. This attracted favourable response [from the public], posting sales of 302,052 units between June 15 and Aug 20,” he added.

For the full year of 2020, Muhammad Nizam said the group expects to record negative Ebitda of between RM200 million and RM500 million, which would still be lower than the RM612 million loss recorded in 2018, backed by the group’s cost rationalisation exercise which began last year.

“Ebidta is a function of you pushing up revenue while controlling your costs. So, even though we are impacted in the sense that we cannot break [last year’s numbers] in terms of revenue due to Covid-19, in terms of costs, to a certain extent, we can control it, which was proven in 2019. This will contribute towards better Ebitda [this year],” he noted.

On the LRT3 project, whose implementation concept was remodelled from a project delivery partner (PDP) regime to a fixed-price contract regime in January last year, he said all contractors involved in the previous agreement would still get their fair share of the project under the turnkey model.

“But of course, along the way, they have to renegotiate the rates and everything. Some are still in progress, but most of the contractors appointed previously have been novated with a new contract under the turnkey model. So, there is no issue,” he said.

On Jan 25, 2019, MRCB George Kent Sdn Bhd — a joint venture between Malaysian Resources Corp Bhd (MRCB) and George Kent (Malaysia) Bhd — entered into a fixed-price contract with Prasarana for the proposed LRT3 project in the Klang Valley.

This came after the government notified MRCB George Kent in October 2018 that the LRT3 project would continue, albeit at a cost of RM16.6 billion — which was 47% lower than the earlier cost of RM31.45 billion.

There are 19 main subcontractors involved in the LRT3 project, including WCT Holdings Bhd, Sunway Construction Group Bhd, Gabungan AQRS Bhd and Mudajaya Corp Bhd, according to reports.

Edited by Lam Jian Wyn

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